Federal stimulus money loosens budget woes 04-09-09

Published 7:00 pm, Tuesday, April 14, 2009

The federal stimulus money is a hot topic as the Texas Legislature moves rapidly toward the June 1 end of its 140-day regular session.

Several female Democratic legislators say turning down the $556 million earmarked for unemployment insurance help in Texas, as Gov. Rick Perry says he plans to do, would disproportionately hurt women.

"In Texas, unemployment is greater for women than for men," declared Rep. Jessica Farrar, D-Houston, at a press conference last Thursday.

Not only that, but a large majority of mothers of children under 13 also work outside the home, Farrar said - a considerable number of them single moms.

Perry has said "strings" attached to the federal money bother him. They include changing Texas law to provide unemployment insurance for part-time workers; those who lose jobs by following a spouse's job change, already provided for military spouses; and using a more recent base period for calculating unemployment benefits.

Perry isn't alone. Several Republican House members, who belong to a group called the Texas Conservative Coalition, stood at a press conference Monday beside a spokesman for the right-leaning Texas Public Policy Foundation to assert that federal spending hurts rather than helps state economic performance.

The TPPF, a free-market, non-profit organization, distributed a study by an econometric firm, which includes Supply-Side Economics parent Dr. Arthur Laffer, contending Texans will pay a high price in the future if stimulus money is used to expand state government programs like unemployment insurance. Government spending reduces private-sector output, the study says.

Will Newton, executive director of the Texas branch of the National Federation of Independent Business, said Texas should use the stimulus money only "for one-time expenditures that will not require long-term commitments when the money has run out."

Expansion of eligibility for unemployment compensation is a positive to the women lawmakers, not a negative. House bills are in the works to make the changes the federal government requires to get the unemployment insurance stimulus money.

The Democratic ladies think this isn't the time to turn down federal help for people out of work, but who don't meet Texas' current criteria for unemployment benefits. The current Texas law provides compensation only for those who held full-time jobs and are looking for other full-time jobs.

Farrar said mothering duties make women more likely than men to work part-time, and more likely to lose a job following their husband's move to a new job, or becoming a caregiver to an aging parent.

"Most of the part-time workers who are over 65 are women," Van de Putte said. "It's time to act now."

Some aspects of the federal assistance are interpreted differently by the two sides.

Stimulus opponents say that federal requirements that the law be changed will stick Texas with higher business taxes after the federal money runs out.

Stimulus advocates say Texas can change the law back if it wants to and wipe out the changes when that happens. Meantime, Texas shouldn't pass up the opportunity to help tens of thousands of out-of-work citizens now.

The opponents, including Gov. Perry's legislative liaison, former state Sen. Ken Armbrister, say the $556 million is reserved for Texas, whether it takes it or not.

The stimulus advocates say that if Texas turns down the money, it will be distributed to other states.

Another area of disagreement involves the Rainy Day Fund, which will contain about $9.1 billion.

Legislators nervous about the stimulus money, including Senate Finance Committee Chairman Steve Ogden, R-Bryan, want to use it to replace spending in areas like education and health care that otherwise would be coming from the state, and preserve the Rainy Day money for the even rainier days he foresees after the stimulus money runs out.

But others, like state Sen. Eliot Shapleigh, D-El Paso, say it's plenty rainy now, and that fund should be used to meet more of Texas' dire needs, while the stimulus money should go for efforts that indeed provide extra stimulus to the economy.

Bill Hammond, president of the Texas Association of Business, says taking the unemployment stimulus money with the conditions attached would be exchanging "short-term gain for long-term pain."

Rep. Farrar says Texas should take the money and run.

"People that I talk to," Farrar said, "just everyday Texans, think this is a no-brainer."